Reversing the Mass Wage Theft in Karnataka: Progress on Back Wages
Update July 20, 2022: The WRC is tracking the 21 largest garment producers in Karnataka, India, that owed arrears to workers due to nonpayment of the minimum wage. These 21 producers collectively operate 180 factories in the state, employing nearly 210,000 workers, more than half of all garment workers in Karnataka. As of January 2022, these manufacturers owed workers $30.7 million in back wages, by the WRC’s estimate.
As of March 2022, all 21 had committed to pay back wages in full to workers at all their factories, including both current and former employees. All 21 also committed to pay the minimum wage properly going forward. The WRC has worked to track and confirm whether these companies have fulfilled their commitments:
- We have confirmed that all these manufacturers have been paying the proper minimum wage to employees since February.
- As of July 2022, we have confirmed an estimated $23.1 million in payments by these manufacturers to nearly 200,000 current employees, with 16 of the manufacturers having paid in full. Several manufacturers—Raymond, Silver Spark, Shell Apparels, and Go Go International—have not yet finished paying arrears to current employees. At one manufacturer, Creative Group, the WRC has not been able to confirm the status of payments. The WRC is urging these five suppliers, and their brand customers (see chart below), to move swiftly to complete all payments to current workers.
- In the case of eight suppliers, we have been able to confirm that payments to former employees have also commenced (see chart below). We do not yet have sufficient data to report specific payment amounts. We are working to confirm the status of payments to former employees by the other 13 suppliers.
Although we are able to track these larger producers, the WRC does not have the capacity to directly track payments by the many smaller garment suppliers in Karnataka, which number in the hundreds and which owed an estimated $27 million to workers at the beginning of 2022. We therefore cannot provide a reliable estimate of how much back pay workers employed by these suppliers have received. The limited information we have been able to gather supports the conclusion that most of these smaller suppliers are following the lead of the region’s major producers and are paying arrears. It is incumbent upon all brands and retailers sourcing from Karnataka to ensure that their suppliers are complying with the law, including payment of all back wages owed.
We will continue to provide updates on this page as information becomes available.
* The “major buyers” column lists brands for which import records or the brands’ own supplier disclosure data, published since July 2021 or the most recent available copy, identify the corresponding factory as a supplier to those brands.
† The brand sourced from the supplier during the period in which wage theft occurred and has informed the WRC that it no longer does business with the supplier.
‡ Gokaldas Images has no relationship to Gokaldas Exports.
In April 2020, a minimum wage increase went into effect in the Indian state of Karnataka, one of the country's largest centers of garment manufacturing. Factory owners producing for leading apparel brands refused to pay. As a result, 400,000 garment workers across over a thousand factories were cheated of the legal minimum wage.
Workers report that the impact of not receiving this increase was concrete and significant: reduced access to food staples, lost housing, lost schooling for their children.
This is the worst wage theft the WRC has documented in the global garment industry. Apparel brands were aware of the theft and allowed it to continue for nearly two years. By January 2022, factories collectively owed workers more than $58 million, per WRC calculations.
In early February of 2022—after a successful lawsuit by the Garment and Textile Workers’ Union (GATWU), after months of engagement with brands by the WRC, and after a growing list of labor rights advocates brought their voices to bear—India's largest garment manufacturer, Shahi Exports, announced that it would begin paying its 80,000 employees in Karnataka the correct minimum wage. The company also committed to pay all arrears, to both current and former workers. Other suppliers soon followed suit. Payments to workers commenced in February 2022 with payouts scheduled to continue over the next several months.
For more info:
- Karnataka Garment Workers Win Half the $59 Million They’re Owed
Sourcing Journal — March 7, 2022
- Indian supplier to UK fashion brands agrees to pay £3m in unpaid wages
The Guardian — February 11, 2022
- Zara, Nike, and Abercrombie’s Indian Factories Weren’t Fully Paying Workers
Vice — February 9, 2022
- 80,000 Shahi Exports Workers Will Finally Get Their Back Pay
Worker Rights Consortium — February 2, 2022
- India Wage Theft ‘Worst’ Fashion Has Seen
Sourcing Journal — January 7, 2022
- ‘Worst fashion wage theft’: workers go hungry as Indian suppliers to top UK brands refuse to pay minimum wage
The Guardian — December 16, 2021